AMC Entertainment Holdings, Inc.

Greetings and welcome to Cinemark Holdings' fourth quarter and full year 2024 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chanda Brashears, Senior Vice President of Investor Relations. Thank you. Please go ahead.

Good morning, everyone. I would like to welcome you to Cinemark Holding, Inc.' 's fourth quarter and full year 2024 earnings release conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas, Chief Financial Officer. Before we begin, I would like to remind everyone that statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to materially differ from those expressed or implied in the forward-looking statements. The factors that could cause results to differ materially are detailed in the company's 10-K, which was filed this morning. Also, today's call may include non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings release, 10-K, and on the company's website at ir.cinemark.com. With that, I would like to turn the call over to Sean Gamble.

Thank you, Chanda. Good morning, everyone. Before we get started, I'd like to first express our deep sympathies for our many friends, colleagues, partners, and the collective Los Angeles community that has been impacted by the devastating wildfires in California. Our hearts go out to all of you as you manage through this difficult time. Thank you all for joining us this morning for our fourth quarter and full year 2024 earnings call. During our prepared remarks today, I will focus predominantly on full year highlights, and then Melissa will provide details pertaining to our fourth quarter financials and go forward capital allocation strategy. As we look back on 2024, box office results once again reinforce the enduring and timeless appeal of shared cinematic experiences that are unique and exclusive to a movie theater environment. Throughout the year, audiences showcase their ongoing enthusiasm for being immersed in captivating stories and events on a grand, larger-than-life scale with cutting-edge sight and sound technology that can't be matched at home or anywhere else. The collective enjoyment, elevated emotional impact, and deep, lasting memories that are fostered by experiencing films in a communal, theatrical setting continue to accentuate the irreplaceable impact of this long-established, yet ever-evolving form of entertainment. North American industry box office reached approximately $8.8 billion in 2024, which climbed to within 3% of 2023 despite the significant headwinds that were imposed by the prior year strikes in Hollywood. As more and more compelling content was released to the big screen, movie-going momentum surged, delivering overall results that far exceeded expectations with numerous all-time records. Examples include the highest-grossing animated film in history, the most successful R-rated film of all time, and North America's biggest Thanksgiving box office weekend ever. Furthermore, multiple franchise installments outperformed their predecessors, while legacy sequels tapped into nostalgia to unite generations, attracting both longtime fans as well as new audiences with a blend of beloved characters and fresh faces and storylines. And as the industry swelled to better-than-expected results, Cinemark once again went above and beyond with year-over-year box office performances that outpaced our industry by 300 basis points domestically and 100 basis points internationally. We have now extended our outperformance trend to 14 of the past 16 years, and relative to 2019, our recovery since the pandemic now exceeds respective industry benchmarks by 900 basis points in North America and 700 basis points in LATAM. During 2024, we maintained our meaningful market share gains of more than 100 basis points relative to our pre-pandemic baseline, and we entertained more than 200 million guests across our global circuit. Furthermore, we also achieved all-time high concession sales with another new domestic food and beverage per cap record of $7.89 that was propelled by our second highest purchase incident rate ever. Altogether, We delivered worldwide revenue of more than $3 billion with $590 million of adjusted EBITDA and a solid 19.4% adjusted EBITDA margin that was flat year-over-year despite a 4% decline in attendance. We also generated strong free cash flow of $315 million and further re-fortified our balance sheet. Our results are the byproduct of an intense focus on effectively navigating the dynamic ebbs and flows of film release volume throughout the year, while simultaneously advancing a wide range of strategic initiatives geared toward positioning our company for future success. Over the past several quarters, I've provided updates on these initiatives, including actions we've pursued to elevate the experience we provide our guests, build audiences, grow new sources of revenue, streamline processes, and optimize our footprint. And this morning, I thought I would share a brief full-year recap. The content we show on our screens is always one of the primary drivers that attracts guests to our theaters. Our studio partners and filmmakers do a phenomenal job of producing all kinds of captivating films that are intriguing to audiences and then advertising those films with compelling campaigns to generate interest to see them. At Cinemark, we then work hard to amplify the impact and conversion of those campaigns, driving audiences to our theaters through the extensive marketing reach, loyalty programs, and sophisticated scheduling tools that we have developed over many years. We now have more than 30 million addressable contacts across our global circuit to whom we send weekly calls to action to stimulate ticket sales. Utilizing purchase history and expressed interest Our emails, push notifications, website, and app automatically tailor communications with millions of unique variations to increase their effectiveness by making them highly personalized, relevant, and appealing. We also have established a wide social and digital outreach that generates billions of impressions each year with increasing engagement that has driven a heightened connection and affinity to our Cinemark brand. Our loyalty programs also deliver significant impact in boosting awareness of upcoming films and increasing movie going frequency. Our guests continue to find tremendous value in our fan favorite monthly membership program, Movie Club. And over the course of the year, subscribers grew another 10% to nearly 1.4 million members. We have an active channel of communication with our Movie Club members. They are consistently our most satisfied customers. And in 2024, tickets purchased through Movie Club grew to represent 25% of our domestic box office. Moreover, combined with our free movie rewards program, loyalty members now consistently represent over half of our domestic box office proceeds every quarter. In addition to utilizing marketing and loyalty efforts to stimulate moviegoing demand, we also have improved our programming capabilities. Through an ongoing refinement of the database tools and controls we use to schedule our show times, we further increase the volume and availability of films that consumers want to see most. Additionally, we once again actively pursued non-traditional content to attract guests to our theaters during slower periods of release volume, as well as to expand our audience base. Foreign, faith-based, concert, and repertory films continued to grow and appeal and generated more than 10% of our domestic admissions revenue for the third year in a row. Of course, beyond what we show on our screens, what's equally important in keeping guests coming back for more is the experience we provide them when they visit our theaters. To that end, we remain committed to continuously enhancing the quality and execution of our in-theater presentation, amenities, atmosphere, and service to deliver a comprehensive entertainment value that is unmatched across our industry and that continues to earn us positive satisfaction ratings from nearly 95% of our guests. In 2024, we continued advancing the multi-year conversion of our entire circuit to Barco laser projectors, reaching 20% of our global footprint. We also diligently maintained our superb fleet of digital projectors, delivering an incredible 99.98% uptime while sustaining our industry-leading light levels across more than 10 million shows throughout the year. We also maintained our commitment to investing in new premium amenities while extracting increased impact from previous installations. In doing so, we achieved record-breaking box office results for our large format screens driven by our XD auditoriums. the world's number one exhibitor-branded premium format. For the full year, PLFs represented 5.5% of our total screens, but accounted for 13.4% of our total box office proceeds, which was up 60 basis points from 2023 and almost 400 basis points from 2019. Similarly, our D box motion seats also set a new box office record that grew almost 40% year over year on a 30% expansion in seat count. Of course, we also continue to derive substantial benefits from our widespread fleet of premium recliner seats that span approximately 70% of our domestic circuit. Another amenity that also meaningfully contributes to the atmosphere and experience guests enjoy at our theaters is our food and beverage selection. During 2024, we further enriched the variety, assortment, and ease of purchase of our concession offerings. We continue to expand enhanced hot food options, hone our menus to better cater to local tastes, and fine-tune the layout of our self-service facings to improve sell-through. We also work to capitalize on emerging consumer trends for convenience with the introduction of more expedited queue lines that are now present in a third of our domestic theaters, while further ramping up our mobile ordering platform. At the same time, we actively leaned into growing excitement for movie themed merchandise, which further elevates the fun, excitement, and anticipation of going to the movies. Collectively, these many actions drove our all-time high food and beverage results that I mentioned earlier. To round out the progress we have made advancing our strategic initiatives in 2024, we also continued to increase the sophistication and efficiencies in the way we operate our business. Over the course of the year, we maintained our focus on continuous improvement in our pursuit to drive productivity without compromising quality by using refined data, analytics, and tools to simplify tasks, increase automation, and strengthen decision making. Through our ongoing efforts, we further enhanced our staffing and workforce management capabilities, as well as re-engineered varied operating procedures to successfully generate a third straight year of labor productivity upside, reducing payroll hours deployed per customer while preserving our guest service standards. We also strengthened our overall sourcing and procurement practices to more aggressively pursue product alternatives and cost deflation as we work to combat ongoing inflationary pressures on feeder amenities and services, cost of goods sold, and utilities. And in the realm of pricing, we further invested in our team, analytics, and market intelligence to more closely monitor and respond to market elasticities at a discrete feeder level so our pricing stays actively calibrated and aligned with evolving demand dynamics. All of these actions provided significant impact in helping us to maintain our strong margins in 2024 that were consistent with 2023, despite the attendance headwinds caused by the strikes. Moreover, we believe they will continue to afford us ongoing benefits as we move forward. I'd like to commend our exceptional Cinemark team for their outstanding determination, skill, and agility to deliver yet another year of stellar results, while continuing to make significant advancements in positioning our company for long-term prosperity. As we turn our attention to 2025 and beyond, we remain highly optimistic about what the future holds for Cinemark and theatrical exhibition. After a relatively light first quarter, the 2025 release schedule for the balance of the year continues to reflect a nice spring back to the recovery trajectory our industry was following prior to the 2023 strikes in Hollywood. And 2026 is already looking like it will notch another step forward from there. As of today, a little over 100 wide releases have been dated this year. We expect that figure will likely grow to around 115 by year end, which is roughly 90% of pre-pandemic levels and represents a further improvement from the past two years that settled around 85%. 2025 hosts the most diversified slate we have seen since COVID with a wide range of genres and varieties of films, both big and small, that truly offers something for everyone. There's action adventure like a Minecraft movie, The Accountant 2, Mission Impossible, The Final Reckoning, Ballerina, F1, and Jurassic World Rebirth, Superhero films like this past weekend's heroic launch of Captain America Brave New World, Thunderbolts, Superman, and the Fantastic Four First Steps. Family Fair, including Snow White, Lilo and Stitch, How to Train Your Dragon, Smurfs, and Zootopia 2. Suspense thriller and horror titles such as Megan 2, I Know What You Did Last Summer, Conjuring Last Rites, and Saw 11. comedies like Mickey 17, The Phoenician Scheme, and A Naked Gun Reboot, faith-based films including The King of Kings and the next season of The Chosen, nostalgia plays like Karate Kid Legends, Freakier Friday, and Michael, Indian drama titles such as Warfare and Downton Abbey 3, and fantasy sci-fi spectacles that include Tron Ares, Wicked for Good, and of course, Avatar Fire and Ash. The list in 2025 goes on and on. And then, 2026's film slate is already jam-packed with new installments from widely popular franchises like The Avengers, Minions, Dune, Toy Story, Spider-Man, Shrek, Hunger Games, and Mario Bros., as well as new original movies from filmmakers that include Christopher Nolan, Jordan Peele, and Steven Spielberg, just to name a few. We are thrilled to see the lineup of compelling content continue to build with so many promising films on the horizon that have already been announced. As we consider the positive progression of film content over the next two years, one of our top priorities going forward is to fully capitalize on that resurgence, maximizing attendance, box office and margin potential. To do so, who plan to continue driving actions to further refine our programming and showtime scheduling while strategically leveraging our marketing, pricing, and loyalty capabilities and aggressively pursuing concession sale opportunities. At the same time, we will maintain our focus on further advancing strategic initiatives to position Cinemark for long-term growth and success. This includes continuing to elevate the quality and value of the experiences we provide our guests, scaling up our investments to maintain and upgrade our circuit, pursuing revenue growth and diversification opportunities, and driving incremental productivity gains. And finally, all the while, we intend to maintain the operating discipline and prudence that have served us so well over the years and helped us build our advantaged market position. We will continue to actively focus on staying ahead of market trends, effectively navigating fluctuations in attendance, remaining disciplined with expense cash and investment management and resolving our remaining COVID related debt. We've made huge strides over the past years since COVID on account of the many actions we have pursued to establish new growth channels, develop enhanced operating capabilities, optimize our circuit, expand our market advantages and strengthen our financial position. We believe Cinemark is in excellent shape in today's environment because of these efforts. Furthermore, we maintain a positive outlook for the future based on the current state of our company, the many opportunities that are directly within our control to drive incremental value creation, and the further industry recovery we anticipate overall. As such, we are thrilled to announce this morning that we have reinstated our cash dividend. This event marks another major milestone in our company's recovery from the pandemic, and reflects the remarkable achievements of our sensational team to date, the confidence we have in the future prosperity and resilience of Cinemark, and our commitment to creating long-term shareholder value. I will now turn the call over to Melissa, who will provide added context on our fourth quarter results and capital allocation strategy. Melissa?